No small business has perfect cash flow. There are just too many things that you have to do exactly right. This includes managing finances, maintaining business relationships, and the effectiveness of your entire business model. But while perfection might be impossible to achieve, strong cash flow can be a reality if you continuously follow the right steps. It’s safe to say that most retail businesses with strong cash flow were able to figure out which strategies or decisions would have the biggest impact on their goal of generating revenue while increasing efficiency. In some cases, the business leader already knows what must be done but simply isn’t making enough of an effort to ensure it is done correctly.
When you are absolutely certain that you are taking the most sensible measures to achieve revenue goals, your list of potential culprits for cash flow issues gets significantly smaller. Here are three questions to ask yourself while thinking of how you can improve your retail business’s cash flow:
Any experienced retailer will attest to the importance of training sales associates. The quality and prices of your products do not matter if employees don’t know how to sell them. So, when examining your cash flow, the first logical thing to consider is whether or not your salespeople are pitching your products correctly. This is why retailers often like to give their salespeople brief, periodic quizzes to make sure they never forget which principles to follow while speaking to customers. For example, they must know the value your products provide, what kind of people are most likely to buy your products, and which elements of the story behind your products are most compelling. A major part of the initial training process is showing employees how to communicate the value your products provide, which typically isn’t as easy as it sounds.
Since knowing how to sell is such a basic but essential requirement for retail success, retailers would obviously prefer to not have to revisit it when they should be thinking of growth strategies. The best way to never have to worry about your employees’ selling capacity is to spend extra time training them. In addition to their daily responsibilities, new employees must become familiar with your products so they can sell them with sincerity. If you don’t have the funds to hire new salespeople because demand is slow or stagnant, you might want to consider a small-sized business loan from a company like United Capital Source. Unlike other alternative business financing companies, we can approve multiple types of business loans for younger businesses that are not in their busy seasons. We can likely structure your terms so you can pay off the majority of the debt when your salespeople are fully trained and capitalizing on the surge in demand.
Since smaller retail businesses usually do not have the funds to launch mass marketing campaigns, they have to make the most out of their initial customer base. These are the customers who keep coming back and referring you to their friends and relatives. This strategy also makes sense from a financial standpoint. It costs less time and money to sell to an existing customer than it does to find a completely new one. You won’t have to worry about your initial customer base writing a negative review on social media. Your connection with your initial customer base is the foundation to your revenue stream, so you must go the extra mile to maintain those connections until your revenue stream has thickened considerably.
You might be thinking, “What if I need to expand my customer base in order to thicken my revenue stream?” Companies like United Capital Source have helped myriad smaller or younger businesses finance expensive marketing campaigns without compromising their ability to cover other monthly expenses. With programs like a merchant cash advance or revenue based business loan, you can launch your campaign well before demand is slated to pick up and make your largest payments when sales volume increases.
The point of new business tools is to make your work day easier. So, unless a new tool is going to give you and/or your team more time in the day to generate revenue, it’s probably not worth the expense. In other words, you shouldn’t take on an additional expense solely because all of your competitors have done the same or you feel it will make your operation seem more professional. One popular example is marketing tactics like social media. An additional expense like a virtual assistant may only be justifiable if your social media following has grown so much that the amount of time you spend on posts is inhibiting you from making sales.
At UCS, we offer honest, non-biased advice to every potential client. If we don’t feel like this is the right time for you to take on more debt or make a major investment, we’ll tell you the truth. There may be other, more efficient ways for you to improve your cash flow at this particular stage of your career. We only approve small business loans when we are certain your cash flow will not suffer over the short or long-term. Business leaders who apply the same concept to their new expenses should have no trouble getting the cash they need to stabilize their finances.
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